Tunisia - International trade

In the 1960s and 1970s, Tunisia's chief exports were oil and
mining products; after the 1980s, the chief exports became manufactured
or processed goods. The export of textiles grew significantly in the
1990s and amounted to 43 percent of total exports in 1999. Olive oil,
chemicals, shoes, and leather goods are also increasingly important
exports. Given that the manufacturing industry is the largest, many
intermediate goods
such as textiles, machinery, and electrical equipment are needed in the
process, and these materials have to be imported. The European Union,
Tunisia's principal trading partner, buys 81 percent of Tunisian
exports and provides 71 percent of its imports. France alone accounted
for 26.3 percent of total Tunisian trade in 1999.

Tunisia has kept substantial large external
trade deficits
that have amounted to over US$2 billion since 1995. In 1999 the trade
deficit stood at US$2.5 billion on exports of US$5.8 billion and imports
of US$8.3 billion. These serious deficits are due to 5 main causes: a
sharp drop in traditional exports such as crude oil and phosphates;
Tunisia's need to import most of its capital equipment; the
practice of converting raw and semi-processed imports into end products
for
re-export
; long-standing deficits in energy and agricultural trade balances; and
an increase in
disposable income
that has led to a surge in the number of imports of
consumer goods
.

Tunisia took steps toward free trade by joining the World Trade
Organization (WTO) and by signing an association agreement with the
European Union in July, 1995. Tunisia will have to increase its exports
and put an end to its trade deficit, a daunting task given that Tunisian
exports have very low
value-added
status (increase in the market value of a product at a particular stage
of production). Plans are underway to solve this problem by encouraging
the domestic manufacture of intermediate goods that Turkey is forced to
import in order to produce goods for export. The government has
implemented several measures to ease this process, such as doing away
with the red tape that hampers exports and allowing exporters improved
access to credit.